Tax collections by state show 11.8% increase in July

Advertiser Staff

State tax revenues for the first month of the fiscal year showed continued economic growth, with officials reporting yesterday that collections increased by $26.85 million, or 11.8 percent, over the same period last year.

The Department of Taxation reported collecting $254.28 million in July, the first month of the 2005 fiscal year.

Revenue from general excise and use taxes, considered the leading indicator of the state's economy, was down about $15 million, or nearly 10 percent, compared to July last year. Tax director Kurt Kawafuchi attributed the decline to a "weekend effect," noting that July 31 fell on a Saturday, pushing the taxes due that day to August.

Individual income tax collections increased by $25.5 million, largely because returns were processed earlier than last year.

State budget director Georgina Kawamura said she was "obviously excited" by the tax figures, "but seeing whether or not it's sustained at that level is the challenge."

Gov. Linda Lingle's administration has maintained that it would withhold new appropriations in the state's $3.6 billion general fund budget until after the state Council on Revenues meets in September, but it has been reviewing budget items case by case.

The council, whose revenue forecasts are used in drafting the budget, has projected a 7.9 percent increase in 2005 and 5.3 percent growth in 2006. It will evaluate those projections next month.